Boss Hoss 540

U.S. Refineries Won't Be Able to Match Diesel Demand
August 11, 2005

The $12.3 billion energy bill signed by President Bush Aug. 8, establishes a tax credit of up to $3,400 for diesel vehicles, something one DaimlerChrysler executive says could give the alternative fuel source a 5 to 10 percent share of the U.S. market, the Washington Post reported.
But despite expectations of growth in the diesel market, the U.S. refining industry cannot produce enough diesel fuel to match significant gains in the number of motorists that burn it.

Europe’s success with diesel-powered autos adds to those expectations. However, diesel prices there continue to skyrocket as refiners cannot keep up with the burning demand.

Refineries can produce either a high yield of diesel or a high yield of gasoline, but not both. According to the newspaper report, many refineries in Europe, for example, were equipped with gasoline production units before governments began manipulating the fuel market with tax breaks for diesels. Gasoline production brings significantly more money to oil companies, and diesel equipment is much more expensive.

European refiners are, however, ramping up efforts in the diesel direction, but it will be five years until they will see meaningful increases in diesel output. Until then, they must import from the U.S.

America cannot keep exporting diesel, though, if it wants supply to meet the projected demand. For instance, the expected 5 to 10 percent market share would mean motorists must buy between 800,000 and 1.7 million diesel-engine autos per year, the report said. To significantly increase diesel output, U.S. refiners would need about 10 years. That means diesel drivers would have to deal with higher prices in an increasingly tight market.

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natstayl

Imagine the poor widow who is gonna have to fill her oil tank in September then again in December, and again in February. Man I feel for them much more than I do for us motorists & commuters.
Nat

HOUTEX

EVERYONE TELLS ME THAT DIESEL IS A BY PRODUCT OF GAS....
I THINK IT IS ALL A SKAM AND WE ARE GETTING SCREWED WITHOUT A KISS.


EAT MORE FRIED POSSUM AND BURN THE USED OIL IN YOUR TRUCK..

tell me how it works...

P.J

I think the "Diesel is a byproduct of gas" thing is old. Kinda like London Broil was a undesireable cut of meat 30 years ago, now it's just as expensive as most cuts
(thank you, inventors of the crock pot).

Ramasaur

Diesel is pretty much a by-product of the refining process with a little modification.. How do you think diesel was invented? Diesel engines were created to run on Peanut oil... someone in the petroleum industry found that the sluge that was produced from refining oil to gas... would combust in a diesel engine...... back in the 50's-60's petro diesel was free... mostly utilized by farmers. Diesel is so expensive now because of the demand caused by the yuppies and their Ford excursions and VW bugs. If diesel was in such sort supply, why would CA and other states have to get rid (export) of millions of gallons because they couldn't consume it? Its one excuse after another.....oil companies have us bent over and the lubrication they are using is diesel........ Wait till winter hits... diesel prices will hit $5 a gallon because of short supply because the northeast consumption of heating oil! Plus they will shut down a couple of refineries.... another 12-15 cent hike per week the refineries are down.....Makes the average person want to puke

CACalomino

All I know is its a joke and everybody is gona pay the price not just us diesel consumers. Prices everywhere are gona go up food etc its just sickening. I sware this country is slowly falling apart from every thing from gas to Social secrurity. Its as if the US has just been sitting around with our thumbs up our #$% thinking we own the $#@%$#@ world and not looking at future problems just the day at hand.

The american people and the darn government need to get there $@%$ strait or its just gona get worse. As for diesel well at 40 cents higher than regular gas out where I live. If this trend gets worse and it keeps climbing and climbing I will give up my smoking delight in favor of a less fun gas alternative. IM not gana take it up the back side so some CEO can count his millions. Or mabe I should just go lee harvy aswald on them and lets see how fast price's go down when the head honcho's start getting picked off LOL jk.

kertoncol

Why hasn't the trucking industry made more noise about the fuel prices. I know they get an extra sur-charge that helps with higher fuel but I don't believe it's enough to cover these prices. Truckers need to get together and stop their deliveries for a few days and demand lower diesel prices. I'm paying over $70 per tank and if it goes much over $3 per gallon I'll be paying $100 for each fill-up. Where does this end???

Lee S

So what the article says is that diesel prices will rise in the US because of a low supply because the US is exporting to Europe?

Think about it. That's pretty slick. You can sell to Europe at any price you want to set and, at the same time, create a supply deficit at home so you can raise prices here.

Wish I had a deal like that.

DR3500

The truckers in Miami did a boycott in the last couple of days, they were on the news. They were going down the freeway in the right lane going 25-30 nose to tail blocking the offramps.

Biodiesel is going to help the situation out some and keep the money here and the farmers alive. Screw sending our money overseas is we have a way to keep it here! Bio production is increasing pretty quickly and places that sell it are popping up all over the place (everywhere but HERE).

txdiesel3500

Well I am confused. An increase in price will increase supply. Man this doesn't make sense to me. O well oil companies are just getting richer is all. jmo

MikeyB

txdiesel3500,
Increase in price will cause people to drive less, which will increase the supply. Think of it this way, if a six pack of beer cost $10, wouldn't you drink less?

MikeyB

txdiesel3500

MickeyB,

Thats correct to a point but Americans on average are consumption hogs. People still have to go to work. All that will be decreased is the pleasure trips. Here in Texas Avg 1 way to work is approx 30 minutes or 20 miles givin rush our delay in account. Pleasure trips are usually taken on vacation (2 weeks out of the year) on average. Your right it will slow the joy riding down a bit.

txd3500

txdiesel3500

P. S MikeyB,

On your beer theory. Lets use water. Thats comparing apples to apples. As beer is not a necessity. It water increases to $3.00 a gallon (for comparrison) would you decrease yor showers to say 1 a week. Washing clothes twice a week?
Intresting discussion MickeyB. Also you could discuss food price increase. Yuck, I like to eat....

txd3500

STATELINE

not if you're dedicated like me

Fronty Owner

I look at it like this.
When I was making $10,000 per year driving a 1971 Chevrolet SWB Step side hot rod, It cost me about $5/day to go to work.
Now, I am making over $40,000 per year and it costs me roughly $7 to go to work. Im money ahead even at current fuel prices.
The people the fuel prices hurt are the ones that make their money from driving or make their money from others driving. Convience stores took a big hit from stolen gas. Local entertainment has dried up almost completely. The fast food places have slowed down. Simply put, no one wants to spend recreational money on recreation because they know they will have to spend it on fuel.